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Saturday, May 29, 2004
Colombia Seeks to Expand Coffee Market at Home and Abroad

By Steven Taylor @ 12:11 pm

Here’s an interesting piece on one of my favotire topics: coffee. Colombians Urged to Drink More and Better Coffee (Their Own)

“Colombian coffee is the smoothest in the world,” Ms. Celeita said, “but what does that matter if it comes out too bitter, or if it comes out with no taste at all?” She then explained how everything from the cleanliness of the machine to the temperature of the water helps determine the quality of a cup of coffee.

The concept may be alien. In this country of rolling coffee pastures and Juan Valdez - the mythical coffee farmer used for promotions since 1959 - it has not been easy to find a good cup of coffee.

The premium beans have traditionally been exported. What is left behind has wound up as a tepid, flavorless drink that Colombians call tinto, a colloquialism for black coffee but, perhaps not coincidentally, the Spanish word for stained.

In also means “red wine” in most of Latin America and “black ink". Indeed, I have never heard it translated as “stained” before, but I suspect that Forero’s spanish is better than mine. He is certainly correct that tintos aren’t all that strong.

The whole idea of building a market in Colombia itself for premium coffee is pretty interesting, and somewhat ironic:

For years, Colombians’ penchant for watered-down coffee was just fine with the federation and the 550,000 coffee farmers it represents.

Then a drop in consumption, coupled with a glut in production, led to a steep plunge in prices. A pound of Colombian coffee now goes for 79 cents at wholesale, an improvement over the 55 cents it brought in 2001, but still low compared with the 1999 price of $1.23.

So the federation is seeking new ways to market its coffee. That includes going after a largely untapped market, Colombia’s 42 million people, a population as big as that of Spain, where people drink twice as much coffee.

Most Colombians, even children, drink coffee. But the rate of consumption is just half that of the United States and less than in many European countries. Colombians also prefer to drink their coffee cheap; they would never pay the $3.50 a cup charged by New York cafes.

“The Colombian has not been accustomed to drinking a cup of coffee of any real quality,” Gabriel Silva, the federation’s general manager, said in an interview in his Bogotá office. The federation has watched with interest as the world’s coffee powerhouse, Brazil, which can produce up to 40 million sacks a year, doubled internal consumption to 14 million sacks through an aggressive advertising campaign in the 1990’s.

In Colombia, where only 1.2 million of the 12 million sacks produced annually are consumed, the strategy is to increase domestic consumption quickly, to three million sacks within five years. “We think it’s possible,” Mr. Silva said, “because we’re starting from such a low base.”

The overall business strategy is interesting as well:

In a multipronged effort to revitalize the industry, which employs up to four million people during the twice-a-year harvests, the federation is helping farmers grow organic coffee and other specialty types. It is also stepping up marketing efforts worldwide with Juan Valdez, his trusty mule at his side.

In its drive to win more of the world’s $8.4 billion specialty coffee market, the federation will open a Juan Valdez cafe in Washington in late August. The second United States cafe will follow quickly, in September, at 57th Street and Lexington Avenue in New York. The federation wants to open 300 cafes worldwide within five years.

It is also going into the coffee-machine-making business. In a joint venture with Salton Inc. of Chicago and Rossi of Italy, it wants to sell sleek single-cup machines, featuring the Juan Valdez label. Mr. Silva said the machines, designed by Rossi, built by Salton and featuring coffee pots made by the federation, could represent $300 million in annual sales.

The strategy is, in part, to reduce the reliance on the middleman, giving Colombia’s coffee growers a bigger slice of the pie.

Getting Colombians to drink more coffee, either at the 11 new Juan Valdez cafes around the country or by prodding them to buy more expensive brands, is another tactic.

“There’s no magic bullet,” Mr. Silva said, “but a basket of solutions.”

And here’s a job:

Here in Bogotá, at the federation’s gleaming offices, researchers in white lab coats ensure that Colombian beans produce a premium cup of coffee.

In one room, metal jars, carefully catalogued, contain samples of beans produced nationwide. In another, beans are roasted and coffee is brewed, with rows of cups set up for taste testers.

David Acuña, a physicist who coordinates the operation, said the laboratory is especially important with the federation focusing on selling quality coffee at home.

Sipping a cup of coffee, Mr. Acuña smiled.

“I love that foam, I’m sorry, but I just love it,” he said. “You know, this really is very good.”

Filed under: Latin America

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